China Must Start Playing by the Basic Rules of Free Trade

Updated May 29, 2007 12:01 a.m. ET

Contrary to Matthew Slaughter's assertion ("Yuan Worries," editorial page, May 22), the vast majority of economists agree that a floating currency is an important tenet of free trade. Floating currencies alleviate the destabilizing effects of large imbalances in trade.

Undervaluation of the yuan makes China's exports to the United States cheaper and U.S. exports to China more expensive, putting American companies who play by the rules at a significant price disadvantage. As a member of the World Trade...